The pound fell to its lowest rate since March yesterday against the US dollar as the greenback continued to find demand on Wall Street. However, the sterling-to-dollar rate is currently 12.8% higher than it was a year ago.
The pound’s tumble could be down to the UK’s bleak economic outlook as central bankers are expected to keep interest rates higher for longer.
The US dollar also made marginal gains against the euro yesterday despite US consumer confidence data for September coming in at 103, lower than forecasts of 105.5 and August’s 108.7 reading.
New home sales of single-family houses in the US decreased by 8.7% in August 2023 to a seasonally adjusted annualised rate of 675,000, the most in 11 months.
On a different note, the S&P CoreLogic Case-Shiller 20-city US house price index edged up 0.1% year-on-year in July. This represents the first increase in five months but outperformed forecasts of a 0.3% fall as home supply remains limited.
The possibility of the US government’s market shutdown loomed over global markets yesterday as credit rating agency, Moody’s, warned it would harm the country’s credit. There are a few days left for Capitol Hill to avert a shutdown by passing a spending bill by October 1.
In the news, banks including some of Europe’s biggest lenders have helped fossil fuels companies raise more than one trillion euros from the global bond markets since the Paris climate agreement in 2016. These findings have raised concerns among sustainable investment campaigners.
Fashion retailer Asos reported profit cuts in its July and August forecasts as poor weather contributed to weaker online demand. These cuts resulted in a £60 million hit to cash flow.
This morning, the GfK Group’s climate indicator for Germany dropped to -26.5 heading in October as persistently high inflation continues to weigh on consumer sentiment.
European data is light for the rest of the day; however, US economists will be watching out for durable goods orders data, due at 1:30 pm (UK time).
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your Personal Trader on 020 7898 0541 to get started.
